Weaker-than-expected Ifo data signal that the German economy is facing mounting pressure

Data from Germany’s Ifo institute, released on Tuesday, revealed that business morale fell more than expected in September, marking the fourth consecutive month of decline.

The Ifo business climate index dropped to 85.4 in September, the lowest since January, down from 86.6 in August and below the forecast of 86.1.

A separate report showed the current conditions index, which tracks present business conditions excluding future expectations, also fell sharply to 84.4 in September, from 86.4 in August, well below the expected 86.1.

The disappointing September data has further dampened sentiment, fueling concerns over the recovery of Europe’s largest economy, which is increasingly under pressure.